Madrid Nuevo Norte will Generate €13.2bn of Business for the RE Sector

12 October 2018 – Eje Prime

Madrid Nuevo Norte represents good news for the Spanish real estate sector. The Town Hall led by Manuela Carmena expects the project, which received the green light at the end of September, to generate €13.2 billion of business for the real estate sector.

The urban development project, to the north of Chamartín train station, is going to house 10,485 new homes, as well as 1.5 million m2 of offices and another 103,119 m2 of commercial space. The acquisition of the plots will involve a total cost of €3.74 billion and the construction costs will exceed €2.78 billion.

The Town Hall of Madrid has confirmed that the tertiary assets will contribute the bulk of the income for the property developers that participate in the construction of Madrid Nuevo Norte. Together, the sales price of those properties will amount to €10.2 billion. In the case of the development of new homes, the business will amount to €2.98 billion, according to reports from Cinco Días.

The results of an economic study for the project show a range of returns of between 11.2% and 16.4%, although the Town Hall warns that the margin will depend heavily on factors such as the evolution of the real estate market and the acquisition price of the land. In terms of the latter, an orientative cost of €2,899.47/m2 is forecast for private housing located in the financial centre.

Following several adjustments, the total buildability of Madrid Nuevo Norte has decreased by 21%, down from 3.37 million m2 according to the initial plan to €2.66 million m2 under the current plan. In addition, the district has been divided into four areas: Chamartín station, the business centre, Fuencarral-San Roque-Tres Olivos and Fuencarral-Las Tablas. Each area will have its own construction timetable and urbanisation costs.

The project will have to be financed almost in its entirety by the landowners, who will disburse €1.2 billion on average. The Town Hall of Madrid is going to spend €307.89 million with the aim of covering the urbanisation costs, which will be added to €24.78 million from the Community of Madrid and €220.49 million from Adif, the concessionaire of the rights.

Original story: Eje Prime

Translation: Carmel Drake

Bain Establishes Joint Venture To Manage Real Estate Asset Portfolio From Liberbank

24 October 2017 – Bain Capital Credit

Bain Capital Credit, LP announced today that it has entered into a binding agreement to establish a joint venture company, which will own and manage a portfolio of repossessed real estate assets from Liberbank. Bain Capital will control and manage the JV with an 80% stake; the two other shareholders are Liberbank and Oceanwood. Bain Capital Credit now owns and manages ten loan and real estate portfolios in Spain.

The portfolio has an appraisal value of more than €600 million and primarily comprises residential units, land and work-in-progress (WIP) assets across Spain. Bain Capital Credit will actively manage the portfolio, including developing some of the land and WIPs.

“We are excited to expand our position in the Spanish real estate market and to control the majority of this JV alongside Liberbank and Oceanwood,” said Alon Avner, a Managing Director and Head of Bain Capital Credit’s European business.

“We continue to consider Spain one of the most attractive real estate markets in Europe and this portfolio’s concentration in central and northern Spain provides a great degree of diversification for our portfolio,” said Fabio Longo, a Managing Director and Head of Bain Capital Credit’s European non-performing loan & real estate business. “This is a great opportunity to participate in Spain’s recovery and to further expand our footprint in the Spanish residential development sector. Furthermore, this investment showcases our expertise in executing complex transactions that require close collaboration with the seller under compressed timelines,” added Mr Longo.

The support in executing this deal was provided by Altamira Asset Management, as real estate servicing specialists; Aura REE and Basico, as real estate valuation specialists; and Cuatrecasas, as legal counsel.

Original story: Bain Capital Credit

Edited by: Carmel Drake

 

Catella Buys 3 Residential Buildings In Madrid & Barcelona

5 December 2016 – Real Estate Press

Catella Real Estate, which is headquartered in Munich, has acquired 277 homes in Berlin, Madrid and Barcelona for €92.7 million, which it will incorporate into its real estate fund Catella Wohnen Europa. The acquisition forms part of the fund’s investment strategy to acquire residential properties across Europe into its portfolio.

“The Spanish market is enjoying a sustainable recovery. Specifically, in Madrid and Barcelona, there are currently some very attractive investment opportunities. Through our Catella network and in collaboration with our asset management and investment platform in Spain, we have identified and executed these excellent acquisition opportunities for our investors”, said Markus Wiegleb, Portfolio Director at Catella.

The Spanish residential portfolio comprises a surface area of 13,469 m2 in total. The fund has acquired two properties in Madrid: the recently renovated building on Calle Genova, 5 for €23.9 million, which was contructed in 1900 and which contains 24 homes; and the modern property on Calle Alaró 4, built in 2008, with 82 residential units, which was acquired for €12.9 million. The third Spanish property, Rambla Poplenou 124 in Barcelona, was constructed in 2002 and contains 59 residential units. It was acquired for €23.7 million. (…).

“Catella has a strong local presence in Europe, with offices in 12 countries. Moreover, we work in partnership with a large number of local companies in other European countries. Our extensive knowledge of the real estate sector and our pan-European reach allows us to access unique investment opportunities for our investors across Europe”, said Xavier Jongen, Project Director at Catella in the residential real estate funds division.

Original story: Real Estate Press

Translation: Carmel Drake

Blackstone To Buy €790M Of Property Loans From CaixaBank

22 July 2015 – Bloomberg

Blackstone Group LP is buying a portfolio of bad loans with a nominal value of €790 million ($858 million) from Spanish lender CaixaBank SA, according to two people with knowledge of the matter.

The debt is linked to newly completed residential units as well as land and homes under development, according to the people, who asked not to be identified because the deal is not yet complete. The sale of the portfolio, known as Tourmalet, is expected to close at the end of the week, the people said.

Spanish banks are seeking to sell off bad real estate debt that has weighed on their balance sheets since the financial crisis sparked a property crash. Lenders foreclosed on more than 70,000 homes in 2014 with Andalusia, Cataluña and Valencia hit the hardest, according to data from the National Statistics Institute.

The assets backing the CaixaBank debt comprise 88% residential property, 9% land and 3% commercial property, according to a sales document obtained by Bloomberg News. The assets are mainly based in Andalusia, Madrid, Castilla La Mancha and Cataluña, according to the document.

Blackstone, which is run by billionaire Stephen Schwarzman (pictured above) has become the largest private equity real estate investor.

Spokesmen for Blackstone and CaixaBank declined to comment on the deal.

Original story: Bloomberg (by Sharon R Smyth)

Edited by: Carmel Drake

Project Kite: Ibercaja Puts €800M RE Portfolio Up For Sale

9 June 2015 – Expansión

Project Kite / The Aragonese group has engaged N+1 to negotiate the sale of 6,900 residential units, 1,300 retail premises and industrial warehouses and 600 plots of land with large overseas funds.

Ibercaja wants to forget about its real estate legacy and focus on its traditional business. After studying a possible operation for several months, the Aragonese group has now decided to sell nearly all of its real estate business. To this end, it has engaged N+1, which has distributed preliminary information about Project Kite to large international funds over the last few days.

Through this operation, Ibercaja offers investors €800 million of foreclosed assets, according to financial sources. Based on the latest available figures, as at the end of 2014, the group held more than €900 million of foreclosure homes, land and property developments on its balance sheet.

The €800 million portfolio will include 6,900 residential units (homes, garages and storerooms); 1,300 retail premises and industrial warehouses; and 600 plots of land, almost half of which have building permits. The homes are primarily located in Zaragoza, Madrid and Barcelona.

Management contract

According to sources, the operation may include a management contract for the remaining real estate assets and the transfer of a team of specialist professionals, comprising around 50 employees. The model for the transaction will be similar to the one adopted by Kutxabank last year.

With this project, Ibercaja joins Bankia, which recently put all of its foreclosed assets up for sale, in the so-called Project Big Bang. These entities are looking to get rid of the real estate assets that are weighing them down, whereby taking advantage of the interest that large funds are showing in becoming Spain’s new property companies, and thus being able to use their resources to grant new loans once more.

The political environment following the regional and local elections has caused many funds to review their strategies, although according to financial sources, they will continue to buy assets provided the misgivings about the general election do not increase.

Ibercaja already explored the possible sale of its real estate portfolio in the middle of 2014, but in the end it backed out.

In 2014, the group also studied the possibility of an institutional investor acquiring some of its share capital; it engaged JP Morgan to assist with that analysis, but ended up ruling out the option. All indications are that Ibercaja will accelerate its IPO in 2016, in line with the philosophy of the savings bank law and the wishes of the ECB.

The Aragonese entity – the result of the merger of Ibercaja and Caja 3 – generated €42.6 million during Q1 2015, up 6% from a year earlier.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake